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The Good News – You Received a PPP Loan! The Bad News – Were You Really Eligible?

Steps for PPP Loan Forgiveness

On Friday, April 24, 2020, the SBA issued new rules regarding the PPP loan program, one area of which focuses on borrower eligibility. When you completed your PPP loan application, you were required to certify that the loan was necessary to support ongoing operations. If you had access to other forms of capital such as available and unused lines of credit, ability to obtain loans from other sources, or significant amounts of cash, investments or equity, you will need to justify why the loan was necessary if and when your application and PPP loan is audited by the SBA.

If you have now determined that the certification on your application was incorrect, and the loan was not needed under the PPP rules, you can return the funds by May 7, 2020, without penalty. Untrue certifications could subject you to a criminal investigation and/or civil proceeding under the False Claims Act.

If you believe you met the need threshold, you should take time now to document your need. The documentation should include some or all of the following: